Hopefully somebody can direct me the right way. Extraction has filed bankruptcy and I have recieved a bunch of papers in the mail over the last few weeks and recently just got a bunch that needs to be filled out ( i am assuming?) and filed. I really dont understand any of it and not sure what to do. First Extraction has NEVER sent me a payment during the past 2 yrs of my lease. If i enquired i was always told they would get back to me, i finally just gave up. (correction: aside from the signing bonus when i signed the lease).There are approx 4+ wells that i know of that my royalties come from (obviously shared with others). I know some people have gotten some checks.How/what do i do this? I dont want to toss a bunch of money away at an attorney for nothing either. Curious where the money has gone, if it will ever show up and what do i do regarding all these papers they sent me? Sorry for the long post. Thanks in advance ( Im in LaSalle,CO/Weld County)
Sounds that bankruptcy is to good for the officers of Extraction. Theft of royalty is a felony.
Even in bankruptcy they still have to pay royalty owners. I would be PERSISTENT with them and contact them weekly to find out why you haven’t received division orders if there is production on your minerals. Go to : Owner Relations – Extraction Oil & Gas. Do you have a copy of your oil and gas lease? That would help if you attach that to your email. Be polite, I am a firm believer that honey is better than vinegar to get results.
Hello Linda, I am in the same boat that you are. I did find some information online that discusses what we need to do as mineral rights owners. It is very lengthy, and comes from Texas, but appears to have solid information that I think would be useful.
[https://stpra.org/wp-content/uploads/2018/06/When-Your-O_G-Purchaser-Goes-Broke.pdf]
Hopefully I got that link pasted in there correctly.
Jennifer
Sounds like the best advice is to determine if as a mineral owner you have not received royalties owed and to get an attorney to help file and document everything correctly?
It’s like everything in our world these days - seems like things are so complicated that the average person cannot figure it out; and always seems to be in favor of the big corporations.
My struggle is that for the piddley amount of royalties we have received so far, it seems counterproductive to hire an attorney, however it seems ridiculous to just “let it slide” because I wonder if we do - will we ever receive any of the ongoing royalties for future production?
I followed the instructions I found from the link, and filed my claim the best I could. I figure that way I am putting the courts on notice that I have the royalties and hopefully it works! IDK it’s a tough situation to be in.
If we would have had more notice - perhaps we could have collectively hired an attorney to help, but individually it seems unpractical.
I know. I just reviewed the electronic form. I will plan to submit a claim, but I am not sure how to calculate what my claim amount would be? Can you free text it and say any unpaid royalties? I was also trying to find out production on wells that are part of this to see if we are not receiving anything and should have. New to this and def clunky in understanding it all. Thanks for your links.
I am trying to remember, but I think it was an option to free text. I had received some royalty checks, so I just used those amounts to arrive at a monthly average, and then multiplied that by the number of months that I have not received anything. I also added wording somewhere in the claim that included any future royalties. I then wrote up a summary outlining how I arrived at my claim amount and uploaded it along with copies of my lease agreement and past check stubs.
Hi Linda, Did you receive a division order after the wells were completed? It could be that royalties have been accruing but haven’t reached the minimum amount yet and that is why you haven’t received a check. One way to estimate your royalty payments (before taxes) is to take your Net Revenue Interest, multiply by the volume of oil or gas that is SOLD (not produced), and then multiply by the average price for the period to get a rough idea on how much you are owed (the actual amount you receive will depend on any futures contracts and marketing agreement that the company has in place). If you have a very small interest and the total amount is less than $100 then it is likely that the funds are being held in suspense until the minimum amount is reached. A quick email and call to their owner relations department can confirm this and any amounts owed to you.
You can search for production volumes for the wells on the COGCC website (click on Data > Production and you can search by well names, operator, etc.)
In general you can use this methodology to determine how much is potentially owed for any proof of claim paperwork that you file.
As was mentioned here it is not a bad idea to consult with an attorney if you have questions, most would be willing to at least do a free initial consultation.
All that said, typically operators won’t stop paying royalty owners because that puts their oil and gas leases in jeopardy and those are their biggest assets. If you find that the operator continues to produce the wells but stops paying royalties (and the amount owed is above the statutory minimum check amount) then I would definitely seek advice from an attorney.
Thanks, Matt
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